Gold stocks decimated, Barrick drops to 21-year low

The gold price fell by $97 on Thursday crashing through the $1,300 an ounce level and causing a fresh sell-off among gold mining stocks.

The gold price is down nearly 24% this year and since April's two-day $200 drop the yellow metal has been in official bear territory, defined as a 20% decline from a high ($1,909 intra-day in August 2011).

By mid-morning Barrick Gold Corp (TSX:ABX) had lost 6.6% falling to a 21-year low as the share's year to date losses top 50%.

Barrick is now worth $17.4 billion on the TSX, nowhere near its market capitalization just two years ago of more than $54 billion.

The global number one gold company in terms of output has been dogged by problems this year including cost blowouts and delays at its massive Pascua-Lama project straddling the border between Chile and Argentina.

Denver-based Newmont Mining Corp (NYSE:NEM) with a market value of $15.7 billion, down from $30 billion last year, shed 5.4%.

But the company's ADRs listed in New York are down a staggering 53% year to date as the Johannesburg-based company struggles with unrest in the its home country's mining sector on top of weaker gold prices.

Fellow South African miner Gold Fields (NYSE:GFI) traded down 3.9%. The fourth largest gold producer has had its value slashed 56% in 2013.

Canadian gold counters Goldcorp (TSX:G) and Kinross Gold (TSX:K) – which this year overtook Goldcorp as the world fifth largest gold miner in terms of output – lost 5.7% and 7.7% respectively.

Goldcorp's market value peaked in 2011 when it was worth $30 billion, over $9 billion more than on Friday, but the Vancouver-based company does at least today have the distinction of being the most valuable gold stock.

Kinross stock has been hammered after the company had billions of dollars wiped off the value of its African operations after the Toronto firm paid over the odds for a Mauritania mine and a $720 million write-down after being forced to abandon a project in Ecuador.

Kinross was the worst performer on the day is now trading at levels last seen in 2002 with a market cap below $6 billion in Toronto, 45% less than at the start of the year.

Australia's Newcrest Mining's (ASX:NCM) suffered steep losses on the Sydney bourse but avoided much of the carnage in in New York as gold fell. The Melbourne-based company are writing off assets by as much as $6 billion, dropping expansion and slashing exploration budgets.

Russian firm Polyus Gold which is partially listed in London appeared oblivious of the mayhem on North American stock and commodities markets and even managed to gain slightly giving it a market value of $9.4 billion.

With the exit of controlling shareholder Mikhail Prokhorov in February, rumours of a merger of Polyus and fellow Russian gold miner Polymetal have continue despite being dismissed by both parties. Should a merger happen it would create the world's third largest gold miner in terms of reserves.

Rounding out the world's top 10 listed gold producers Harmony Gold Mining was also hit, down 3.3% in New York.

The Johannesburg-based miner now has the dubious distinction of being the worst performer in the sector year to date as it reassess operations in South African and Papua New Guinea.

Peru's Compania de Minas Buenaventura (NYSE:BVN), which just edges out Canada's Yamana Gold (TSX:YRI) in terms of annual gold production shed 5%. Yamana, which produces just over 1 million ounces per year was hammered down 5.8% on the Toronto big board.

Frik is editor and writer for MINING.com. Frik has worked as a financial journalist for 15 years appearing in a number of business and consumer publications including British Airways in-flight magazine, Business Insider, Investment.com, Driving.ca, YCharts and Business in Vancouver. Frik was a speaker at the 2014 Global Mining Summit in Las Vegas, the Mine Lifecycle Management conference in Salt Lake City and the 2015 Canada Investment Conference in Vancouver.
(DISCLAIMER: Frik Els does not own shares or hold positions in any of the equities he writes about. Nothing written should be construed as a solicitation to buy or sell any securities. Seek the advice of a broker/dealer first.)